High-Yield Savings: How to Make Your Money Work for You!

 

 My husband recently received his severance check from work (he was laid off in May but given two months as a paid employee following that), and my job is to find the best way to help that check continue to grow, while also keeping it fluid and useable. In the past when we had extra savings to set aside, like for retirement, we would invest it or put it into a Certificate of Deposit (CD). My husband has actually done a fabulous job setting up laddered CDs that each have a 1-year term and mature every month of the year for our backup fund. That way they are earning money, many of them 4% or better, but we can still access it at least once a month. With little or no income coming in (unemployment hasn't materialized yet) though, we'd like to keep this severance money even more readily available. Thankfully, God recently taught me about High Yield Savings Accounts.

 You can read about these on the Doctor of Credit site or Nerd Wallet, but I'll break down the basics for you here. A standard savings account at a regular brick and mortar bank might net you as much as 0.56% interest, though most are much lower. For example, the savings account I just opened at Chase only pays 0.01% (Don't worry, I'm getting a substantial sign up bonus). That makes 0.56% look pretty good, but realistically you can do much better. Our Navy Federal Money Market Savings account has a laddered interest rate (where you get a different rate depending on how much is in it) that can earn as much as 1.5%, but you have to maintain a minimum balance of $50,000 to see that. Since we currently only have $849 in it, it gets 0.0%. Brick and mortar banks, ones which have local, physical locations, can be really nice if you run into trouble and need to speak with a banker. The problem is, these banks have to pay for those locations and all the staff involved. That's a big part of why you'll only see an average of .56% on their highest yield savings accounts. 

 But exactly how much money are we talking about? What is the difference between 0.01% and 0.56%? I'll tell you. Let's say you have a little nest egg saved up of $25,000. If you put that into a regular savings account earning 0.01%, in a year you would have received about $2.50 in interest. If your interest rate was 0.56%, that increases to $140. That's a big jump! So how can you do even better? Online banks.

 Yep, there are banks that are primarily, or even completely, housed online. This saves them the overhead of maintaining local branches in every city and town of the country which results in being able to offer MUCH HIGHER INTEREST! As of July 2025, you could find interest rates with these banks as high as 5%!!! But wait, can you trust an online bank? How do you know what they're doing with your money if you never even see a teller? Good questions! 

 Legitimate banks are covered by the FDIC (Federal Deposit Insurance Corporation). Their checking, savings, Money Market, and CD accounts are insured up to $250,000. What's not insured? Mutual Funds, Annuities, Stocks and Bonds, and other market dependent investments. They don't cover those because you assume an inherent risk of the market going up or down when you invest in them. With a standard account, you put money in, it gains interest (hopefully), and you take money out. This is what the FDIC guarantees. Here's what you need to know - not all online "banks" are covered by the FDIC. And some are not even banks, they are what is referred to as Fintechs, or online entities that funnel money into banks. Did you learn a new word today? Me too!

 Ok, let's break down what a Fintech is. According to Investopedia:

Broadly, the term “financial technology” can apply to any innovation in how people transact business, from the invention of digital money to double-entry bookkeeping.

  You likely use this technology every day. It could be as simple as transferring money between your own bank accounts, using Venmo to pay a friend, or managing your investments on an app like RobinHood. What I'm specifically looking at today is when Fintech refers to a bank you might see online, like Chime or SoFi. These digital banking platforms can offer a lot in terms of features, but what's really behind them? Chime, for example, is not actually a bank itself. It is a digital platform that is connected to a bank called Stride. At the bottom of their website you'll see a note that reads:

Chime® is a financial technology company, not an FDIC-insured bank. Banking services provided by The Bancorp Bank, N.A. or Stride Bank, N.A., Members FDIC. Deposit insurance covers the failure of an insured bank. Certain conditions must be satisfied for pass-through deposit insurance coverage to apply.

 What does that mean? You upload your money to Chime and they send it to The Bancorp Bank or Stride. Both of the banks that Chime works with are FDIC insured, but Chime itself is not. Is this a problem? Most of the time, no, but occasionally this can go sideways.  For example, last year in May a company called SynapseFi abruptly shutdown and declared bankruptcy. This was the conduit for several Fintech banks to connect to their FDIC insured counterparts. Let me give you an in person example. I want to deposit money in my bank, but I don't want to go there myself, so I hire Bob to drive it to the bank for me. On his way, Bob gets into a car accident and ends up in the hospital on life support. Poor Bob. But poor me too because my money is still sitting in his car! No one knows who it belongs to or where it came from so it probably just goes to the government or sits in some evidence storage facility indefinitely. When SynapseFi shut down, the thousands of transactions they were facilitating disappeared with them, causing the delay or loss of more than $160,000,000. That's a lot of zeros! Some people got their money back eventually, many have not. So what can we learn from this scenario?

 Know your platform. Is the bank you use an actual, FDIC insured bank or a portal that links to one? How can you know? Your first thing is to check what the site itself says, like Chime reported above. If the site claims that it is FDIC insured, you can check on the FDIC website with their BankFind Suite search. If you search here for Chime you will get 0 results, but if you search for Stride or The Bancorp Bank you will see their listing. Still unsure or want something more tangible? You can call the FDIC at 1-877-275-3342, but expect lengthy hold times. With other sites, like Hustl (I know, crazy choice in naming, eh?), it is actually just a division of the bank that it represents online, Vantage West Credit Union. This means, as I understand it, that there is no middle man between Hustl and Vantage West and your deposits are insured the entire time by the NCUA (National Credit Union Association, like the FDIC for Credit Unions). Their site states:

All deposits under HUSTL and Vantage West Credit Union will be combined for a total insurance amount of $250,000.

 I looked up Vantage West on the NCUA Credit Union Locator (Note: you have to leave off the words "Credit Union" to find things) and found it! This made me feel quite a bit better about using a site called Hustl 🤣.

 So, if you do your research, you can find an online bank that is just as secure as a brick and mortar one, if not more so. According to this Newsweek article, by March of this year more than 320 bank branches had been shut down. In person banking is just getting more and more expensive and in some ways, digital banking could be more secure. And on top of that, you can get some of those incredible interest rates. Not ready to hop on board with a shady-sounding app called Chime or Hustl though? Let me point you to some bigger name players with some great offerings.

 You won't just find little Credit Union startups in this list of High Yield Savings Accounts, there's some pretty familiar names in there as well. For example you'll see rates like: up to 4.10% with Barclays (or even more if you have an AARP account), 3.5% with American Express, and 3.85% with Sallie Mae. These are big names with a long history that might make you feel a little better about thier online-only presence. 

 With having a large amount to save, like my husband's severance, I want to find a place that I feel safe about, without any hidden loopholes (like, for example, many bank limit how much you can withdrawal each day or month) or extra fees. My husband HATES fees! So, what was my decision? In case you haven't already guessed it, I went with Barclays. They are a trusted name in banking for 334 years - can you believe it?!? They first opened their doors on November 17th, 1690. They have a strong financial history and I'm not worried about them being a fly-by-night upstart. I already have an account with them, a Hawaiian Business Mastercard, so that should make things smoother. I double-triple checked and they have no monthly fees and no annual fees, and they have no limits on the amount you can withdrawal on any day or month. The AARP offer has no minimum balance to receive the 4.4%, so I don't have to worry about if and when we need to withdraw some to pay bills. And going back to the interest earnings I spoke of earlier, instead of the $140 I would earn in a 0.56% savings account, this one will net me $1,100! Now THAT's what I call interesting (yep, pun intended)! Speaking of the AARP offer, that's available to you, too! 

 I recently signed up for AARP both because I'm now retired and because I got a great deal. I'm going to write posts on AARP in the very near future, and I wrote one a few weeks back on Capital One Shopping Portals, but just in case you want to jump on this before I get around to it, here's what to do. First, start an account with Capital One Shopping (yes, this is different from the Capital One Credit Card portal). It's quick and easy, not to mention free, and this year alone I have received about $375 in cash back with an additional $50 pending. The super nice thing is you can stack this cash back with offers from your credit card with a little digital hijinks that I explained in my earlier post. For now, though, what you need to know is that Capital One Shopping will have you install a browser extension that watches what sites you visit online. Then, if they have an offer for that site, you'll get an email with a targeted offer you can't receive anywhere else. That's how I got an offer for $10 cash back when I signed up for AARP. Just to clarify, I had a Capital One Shopping account with the browser extension installed, then I visited AARP's website to check it out. Several hours later (maybe up to 13?) I received a targeted offer that I had to click through to receive. 

HERE'S THE IMPORTANT PART: just clicking through the offer won't apply it. You actually have to click on the "S" button in your browser and select "Activate":

 Don't ask me how long it took me to figure out that last part, or how many offers I missed out on because of it 🥹. But that's not all! As if getting $10 back on a $15 purchase wasn't good enough, if you hold a Chase Sapphire Preferred* card (and if you don't, you probably should!), they are currently offering a bonus through their Chase offers of $8 cash back. In case you didn't get the math, that's $18 cash back for a $15 dollar purchase. Then, if you open this Barclays Savings account through the AARP offer link, you'll get a $200 bonus after depositing $25,000. Not everyone just got laid off and has a severance check to deposit, but if you happen to have $25,000 just sitting around in a low-yield savings account, this could be an awesome opportunity, because on top of the $200 bonus, you also receive 4.4% interest on your account with any balance as opposed to the tiered interest they offer on a regular savings account which would require a balance of $250,000 to get the top interest rate of 4.1%. Yep, that little $-3 purchase of an AARP membership can sure pay off! Oh, and in case you were wondering, no, there is no age minimum nor retirement status required to open a membership. AARP doesn't have a referral link I can post here, but if you email me at saltyzebrablog@outlook.com, I'll send you a referral link that will get you 3 months additional for free and give me 3 free months too!

Here's the Thing: I know that was a lot of hoops to jump through that I just talked about and that can be overwhelming. The TLDR of it all is, low interest = bad, high interest = good. Oh, and be sure you feel secure in the bank where you store your money!

 * Chase Sapphire Preferred

o   Earn 100,000 bonus points with Sapphire Reserve® or 75,000 bonus points with Sapphire Preferred®. I can be rewarded if you apply here and are approved for either card.

o    https://www.referyourchasecard.com/19t/B5DPR7IJTM